Thursday, 1 August 2013

And Econ 101 dies (updated)

"It is based on the notion that increasing supply of houses at any price will somehow bring down prices. This is trickle-down economics at its most dubious."

WTF?!

Yes Phil increasing supply does lower price. Assuming that demand is not totally elastic, just draw a supply and demand diagram and move the supply curve out to the right, price goes down. Its Econ 101 stuff.